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Low-wage rate

The low-wage rate shows the proportion of employees whose earnings are by two thirds below the median income of all employees.

The decisive criterion for an income to be classified as low income is the difference from the general wage level. This refers to gross hourly earnings.

Persons employed in agriculture, in public service and in establishments with up to ten persons employed are not included in the calculations. Also, only those persons were covered who were aged between 15 and 64 years and were not undergoing education or training.

Low wage starting at Euro 10.36

In 2010, the low-wage threshold was gross earnings of Euro 10.36 per hour. Lower hourly earnings were classified as low wage.


Low wage for one in five employees

In 2010, 20.6% of the employees got low wages. Hence one in five earned less than Euro 10.36 per hour in gross terms. With 37% of the persons employed in the new Länder receiving low wages, low wages were much more widespread there than in the former territory of the Federal Republic, where the percentage was just 18%.

Share of persons in employment with low wagesEnlarge picture


Female, young, working as hairdressers or cleaning ladies

Low wages were quite unevenly distributed across groups of the society and economic branches. In 2010, 27% of the women got low wages, compared with 16% of the men. One of the main reasons is that women work much more frequently part-time or in marginal employment and, consequently, receive markedly lower gross hourly wages.

Age plays a role, too: An above-average number of young employees received low wages. 51% of all employees aged 15 to 24 years got low pay.

In 2010, the proportion of low-wage earners was particularly large among taxi drivers (87.0%), hairdressers (85.6%) and in the cleaning branch (81.5%). Other branches with an especially large number of low-wage earners were restaurants (77.3%), washing and dry cleaning (73.6%) as well as cinemas (73.5%).

Share of persons in employment with low wage by education, 2010
in %
Kind of education%
Source: Structure of Earnings Survey 2010.
Without vocational qualification52.8
With apprenticeship or college degree17.7
With university degree1.7
Total20.6

Qualification protecting from low wage

Only some 2% of the employees with an academic degree received low wages in 2010. Among persons employed with an apprenticeship qualification or a full-time vocational school certificate, 18% were affected, while the proportion among those without vocational qualification was markedly higher (53%).

 


Information on the Indicator

Description or definition:
Percentage of employees with low-wages

Low wages are determined in relation to the distribution of earnings of all employees. Thus, workers with low wages are employees who receive hourly wages below 2/3 of the median gross hourly earnings.
The low income threshold below which all earnings are defined as low wages was calculated according to an approach which has been widely established and is used among others by the OECD and the International Labour Organization (ILO). In 2010, the low income threshold with respect to two-thirds of median hourly earnings was at Euro 10.36 in Germany..

Source
Structure of Earnings Survey 2010

Information for interpretation:
Basis for the calculation are employees in all economic branches (NACE groups) with exception of agriculture, fishery, public administration, private households and extra-territorial organizations in enterprises with at least 10 employees.

© Statistisches Bundesamt, Wiesbaden 2014